Agriculture and Rural Development

1. Agriculture and Rural Development

2. The agricultural and development sector is the foundation of the Tanzania economy, • accounting for 45% of total gross domestic product (GDP) and over 70% of exports by value in 2002. • Smallholder farmers (about 4.5 million farm families) produce about 55% of total agricultural output • and over 80% of the value of marketed cereals. The smallholder farmers are the major producers of • maize, sorghum, millet, cassava, rice, plantains and pulses, as well as cash crops like coffee, cotton, • tobacco and cashew

3. Both the private and public sectors are involved in estates agriculture, but the • private sector is dominant in tea, sisal and tobacco, while government estates are significant producers • of rice, wheat, sisal, sugar and beef. The proportion of the population that depend on agriculture as a • source of livelihood is estimated at about 78%, which is a slight reduction from about 83% in 1990.

4. The economic reforms of the past two decades have impacted on the agricultural sector growth, • which during the 1970s had declined to less than 1% per annum. By creating and enhancing producer • and other market related incentives, the reforms led to accelerated agricultural growth from 1% during • 1976-1980 to 3% during 1980-1985, to 3.2% during 1986-1991, and to an average of 4% up to the turn • of the millennium. Agricultural exports also expanded as export crop production expanded, from just • 1.8% during the 1980s to 7.7% during the 1990s.

5. Government’s National Agriculture and Rural Development Sector Strategy • Tanzania’s agriculture and rural development sector policies and strategies have evolved • overtime with the changes in the political and macro-economic policy environments. This evolutionary • process can be broadly divided into three periods

6. (a) from the mid 1960s to the mid 1980s, • (b) from the mid 1980s to the mid 1990s, and (c) from the mid 1990s to the present time (December 2004).

7. From • the mid 1960s to the mid 1980s Tanzania pursued policies towards “African Socialism”, enshrined in • the 1967 Arusha Declaration, which put great emphasis on fighting poverty, ignorance and disease. • The cornerstone of the policy was the UJAAMA village – a rural agriculture collectivization • programme aimed at modernization of the agricultural sector and making social services more • accessible to the rural dwellers3. The policy initially encouraged progressive farmers to expand with • the hope that others would follow their example, but it turned out that only the few who were • recipients of state funds benefited and there was little impact on reducing rural poverty.

8. While the UJAAMA policy had some positive impacts, especially in the political and social • spheres4, it had failed in the economic sphere. The policy down-played the role of the private sector • and of the individuals in economic production and trade since its ideological orientation was towards • state controls and common ownership of productive resources. The result was a build-up of • disincentives among producers which led subsequently to declining outputs and productivity in all • sectors of the economy

9. The process of economic reforms and liberalisation began in 1986 only after the GOT had • become convinced that economic recovery could only come about with changes in economic • management, namely the lifting of controls and allowing free play to the incentives structure in order • to remove distortions. Significant policy shifts were therefore ushered during this period with the • launching of the Economic Recovery Programme (ERP), which introduced reforms aimed at creating a • competitive environment for agriculture, industry and trade

10. From the mid 1990s until the present time (end 2004), Tanzania has achieved a significant • improvement in macro-economic performance. GDP growth has averaged 5.3% over the past five • years (reaching 6.2% in 2002 and 5.6% in 2003) and inflation has fallen to within single digits. Donor • confidence, which had waned during the early to the mid 1990s, and saw the reduction or suspension • of some aid flows, was restored with the signing of the Enhanced Structural Adjustment Facility • (ESAF) with the IMF in 1996, and opened the door for inflows of aid and investments.